The shadow of stakeholder's charging cap is being cast far and wide over financial advice. What was once bread and butter business before stakehol-der is thought to be heading for a crash commission diet.
But the outlook for IFAs is by no means all doom and gloom. The corporate pensions market is clearly set for take-off with employers scrambling to review their pension arrangement before the October 8 deadline.
Even if the employer is simply seeking reassurance that the firm is compliant, it will involve a compliance audit and documentation which needs to be produced if anyone complains to Opra – that is a service for which IFAs can justifiably charge a fee.
The opportunities to foster a thriving IFA business are out there, even in the threatened depolarised, stakeholder environment – you just need to know where to look.
Recent developments in the IFA sector clearly show advisers have not been sitting on their hands. You only need to look at how many IFAs and networks have realised they have to adapt to the changing market and have realigned their strategy for growth and survival.
National IFA Lighthouse, which launched last year and floated on Aim in October, is repositioning itself as a wealth manager to take on big investment banks like Merrill Lynch. To get this message across its new logo replaces the words independent financial adviser with wealth management.
At the same time, another relatively young IFA the Millfield Group, which floated on Aim in March, has launched a new division called Millfield Associated Partnerships. The group is using MAP to grow by taking equity stakes in small IFAs to avoid the risks associated with fully acquiring firms.
Earlier this year, German IFA MLP, which is seen as a major player in Europe, entered the UK market and opened an office in the City of London. Again, like the others, it focuses on wealth management and targets mainly professions such as doctors and engineers. Part of its strategy is to employ only graduates as IFAs, an unusual approach in the UK.
Lamensdorf Group announced this month that it was going international and has acquired Tokyo-based IFA Ross Alexander International. The move gives the IFA a presence in Japan, China and Switzerland.
Then there is the new IFA, Corporate Planning Group, which launched this month targeting wealthy people and business owners. It claims to be different to other IFAs in that it combines 10 companies, including an IFA, a venture capitalist and an emp- loyee benefits consultancy in the group to offer a complete financial planning service.
Cardiff-based Interlink Premier Network is setting up an associate member support service for directly regulated IFAs and is looking to acquire another network as part of plans to float on Aim.
Each week, Money Marketing is going to devote a page to exploring what your options are and how you could adapt to secure a safe future for your business. We will cover issues such as lead generation, moving to trail and fund-based commission system, relationships with lawyers and accountants; choo- sing your niche, getting backers for Aim listing or flotation, pared down advice, marketing to the mass market, buying other IFA businesses, using the press to build a business, selling your services to other IFAs, effective direct marketing and going international.
Next week, we cover what business is to be had at the high-net-worth end of the client or prospective client scale.